I was just talking to a friend of mine on Facebook summarizing my current thoughts on the state of startup’s / businesses. Added a bit more to add some context to my current thought process:
“Most of the new startups start with business models that have eventual tipping points of success. Where its a zero to one / monopolistic / only one winner takes all approach.
This makes the unit economics sometimes not making too much sense.
I just want to start something simple…that makes good money to solve simple real world problems where I can add value by providing a better customer experience.
For example an agency – its all done before. Proven business model. Things that have been done before and sometimes seem un-sexy is where the money is at.
Its nothing too game changing, I just need to set up and automate enough processes to make it as efficient as possible.
That is a business.
Low Customer Acquisition Cost (CAC), high Lifetime Value (LTV).
Then just spend the time to oil the mechanism – getting better acquisition channels and strategies, better onboarding process, better re-engagement processes to up sell / down sell and cross sell various related solutions that solve the customer’s pain point.
And obviously deliver value.
I think venture backed stuff should deal with more real world issues – like eliminating hunger or something that has no real commercial value but brings up quality of life for those who do not enjoy the same quality of life us.”